The pDEX is a different kind of exchange. It’s non-custodial (which means your money is actually yours), it’s decentralized (built entirely on-chain), and because it’s powered by Incognito — it’s completely anonymous , of course.
It also facilitates instant matches by means of an automated market-making mechanism (more on this in a bit).
pDEX is the privacy-focused, inter-blockchain and instant-matching rendition of Nick Johnson and Vitalik Buterin’s conversations on Reddit circa 2016, and Hayden Adam’s implementation of Uniswap in 2018.
Let’s get to it.
How to trade with no order book
On exchanges like Binance and Coinbase, liquidity is provided by market makers who specify prices at which they are willing to buy or sell. On pDEX, trading occurs within a pool. Liquidity providers contribute even liquidity to both sides of a trading pair, and the pDEX mechanism automatically adjusts the exchange rate of every trade to keep the pool values at a constant. Want to dive a little deeper into the mechanics? Refer to the technical overview.
Access pDEX from the Incognito wallet
Tap “Trade” from the home screen.
Choose your assets and amount
In the top section, select the asset you want to sell. In the bottom, select the coin you want to buy.
You can select any trading pair that you prefer. Don’t see a pair you like? List your own.
For demonstration, we’ll do PRV and USDT.
Then, choose your amount. If you want to sell a certain amount of PRV, enter it on in the top section. If you want to buy a certain amount of USDT, enter it in the bottom. Whichever section you leave blank will be calculated automatically based on your entry.
(Optional) Set speed and slippage tolerance
The trade screen has a “Simple” and a “Pro” dashboard. The simple dashboard, shown above, contains:
Balance - The total amount of that token you hold in your current keychain.
Max price - The max rate of exchange for the assets you’re trading.
Max price impact - The max rate of slippage plus the percentage difference between external market prices and the pDEX price.
Fee - The total price for the transaction. If using Uniswap or Kyber, the fees of those platforms will be here as well.
Exchange name - The name of the exchange your trade is made with (Incognito, Kyber, or Uniswap).
Pool size - Across from the exchange name, the number of each asset in liquidity pools.
To adjust the speed of your trade and your slippage tolerance, tap “Pro”.
To set your slippage tolerance, type in the max percentage for acceptable trades. Any trade that exceeds this limit will fail.
To speed up your trade, tap the number of lightning bolts you want. The more lightning, the faster the trade Each speed upgrade increases the transaction fee.
Tap “Preview your order”
When you’re satisfied with the rate, speed, and slippage of your trade, tap “Preview your order”.
Check amounts and the fee, then confirm
One more time, ensure the rate, fees, and slippage are accurate. If you selected a lightning bolt speed upgrade, the fee will be listed as a “priority fee”. Then, click “Confirm”
Wait for the transaction to process
Wait for the transaction to process, then go about business as usual. In a few minutes, your new coins will show up in your account!
Success! You just made your first 100% confidential trade.
Now, what if there isn’t quite enough liquidity for your preferred trading pair? Or maybe that preferred trading pair isn’t listed?
Take things into your own hands.
How to become a liquidity provider
To contribute to an existing pool , you’ll have to provide even liquidity to both sides of the pair to ensure the ratio is maintained.
As a liquidity provider, you can add any pair you like — including native Incognito tokens. If you are the first to contribute that trading pair, you’ll set the exchange rate – the amounts you deposit will determine the initial price.
Alternatively, you can provide one side of a pair in specific assets using the Provide tab. You’ll earn up to 28% APY on your crypto.
Ready to start trading?
Download the Incognito app above to get started! If you have any questions, you can reply directly to this post.